A closely watched trader says memecoins and an additional crypto subsector are likely to outperform the rest during this market cycle.
Pseudonymous analyst The Flow Horse tells According to his 204,000 followers on social media platform
“Forget the wealth effect of Bitcoin or ETH. The profits made on memecoin capital will create a new alt cycle.”
Besides meme crypto assets, so is the top analyst optimistic on altcoins belonging to the artificial intelligence (AI) subsector.
“Barbell AI and memecoins portfolio seems to be the [degenerate] play this cycle.”
While The Flow Horse sees great potential for AI and memecoins, he warns that the crypto markets are starting to send signals that they are overheating. The trader is looking at altcoin financing, which tracks the fees paid by crypto traders who hold futures or margin positions.
According to the crypto strategist, altcoin funding is hovering at high levels, indicating that a correction may be in store to flush out traders with excessive debt.
“I’ll just say this. The last time we were on the verge of breaking an all-time high (ATH), we consolidated below the level for a month. Alt funding was around this level, but ended up reaching twice these values after the ATH break.
BTC dropped 20%, and many alts fell double that amount.
Right now we have four sessions all trading within the same tight range. Expect some f*ckery.
You can always treat the market like the S&P [500] – long and strong above ATHs (in this case Bitcoin), and defensive below.”
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Generated image: Midjourney